Deposit refund for broken lease 1 wk before scheduled to move in

[Sarah Barrett]

We have a signed lease for a tenant to move in Aug 1. Tenants let us know yesterday they need to break the lease agreement for a family emergency. We are trying to arrange new tenants ASAP. Are we legally obligated to return their full deposit? Is it legal for us to keep a prorated amount to cover days with no tenant beginning Aug 1? The property is in Indiana.